Natural Gas Price Analysis – Natural Gas Stalls Below $3 Resistance as Heat Wave Lacks Momentum

Natural Gas Technical Analysis

The natural gas market remains flat on Wednesday as traders continue to see the $3 level above offer resistance. Just above there, we have the 50-day EMA and then finally, the 200-day EMA both offering resistance as well. Interest rates climbing in the United States has a little bit of influence here, but I think the biggest thing is going to be whether or not the Europeans will have to import natural gas from America this winter.

Summer Demand Headwinds and Seasonal Triggers

The conflict in the Middle East continues to make that a real possibility, but we’ll just have to wait and see if that actually plays out. This time of year is typically very quiet for natural gas because the demand will be somewhat subdued unless, of course, there is a major heat wave. There have been a few flare-ups in America this year, but not enough to take out supply, and therefore, you have very weak pricing.

We are trading the August contract right now, and the August contract is pretty weak for demand. Again, we need some type of heat wave to change that, or maybe some type of situation in the Middle East that threatens European supply. This cyclical trade is one that I watch quite often. As we start to head into late fall, it starts to look a little bit more bullish most years. That’s what I’m waiting on. Right now, unless someone is a short-term back-and-forth trader, there probably isn’t a whole lot to do in this market. This is a short-term market at best in this environment.

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